The action at Club Silencio is one of the most mysterious sequences in Mulholland Drive (2001), David Lynch’s modern classic that is comprised almost entirely of perplexing scenes. It comes at the end of nearly two hours worth of enigmatic storytelling that muddles that names, faces, and experiences of two women and seemingly unrelated supporting characters. But what really happens at Silencio, and what does it mean for Betty (Naomi Watts) and Rita (Laura Elena Harring)?

As with any interpretation of Mulholland Drive, there are many different theories that exist. This explanation is one of many but has been adopted by many viewers as the “correct” one, or at least one that could potentially have been in David Lynch’s mind. Film is a medium meant to be interpreted by the viewer, and any analyses of Mulholland Drive (or any other film) that differ from the norm are perfectly acceptable. Still, the filmmaker always has an intent with a narrative, and this explanation attempts to uncover that intent.

Club Silencio opens with a magician/MC (Richard Green) speaking about the power of illusion. “No hay banda, il n’est pas d’orchestra, it is all an illusion,” he says. He points out the sounds behind his voice are an artificial construct, the things the audience sees are all false. Everything about the experience is fabricated and nonexistent. He’s speaking to the audience at the club, of course, but also to those viewing Lynch’s film.

Mulholland-Drive.net offers the following explanation on Club Silencio: “If the blue box is 'personal' to Betty/Rita, the Club Silencio is the box writ large, it's for all of us. It's open to the public and we, humankind, are the public whether we know it or not. In it, the Magician/MC, Lynch's alter-ego, is explaining to us how it's done and what's going on but at the same time keeping the trick up, almost as to prove how our eyes can be so continuously fooled by what is happening in other dimensions we cannot see or understand. And the artist is the Magician who straddles the dimensions and knows how to use beauty to fool the human eye. When we erroneously assume the Magician's act is over, Rebekah Del Rio's rendition of her Llorando is indeed one of the surprisingly beautiful and intense moments in the film.”

Movies, like any art form, are false. The very label of "fiction" promises of large degree of the not-true, and watching a film involves an implicit agreement to buy into an illusion. But in this film, the falseness is even more extreme: Betty’s whole life as depicted in the film to this point (when she visits Club Silencio) is false. We learn in the last section of the film that her name isn’t Betty; her name is Diane, and Rita is a woman named Camilla who is no longer her lover. Cinema is an illusion, and so is Betty.​

The magician's speech informs us that illusions are composed in a manner attempting to emotionally fool the audience, to render an emotional response, and we as audiences know this yet fall for it anyway. Just as Diane has, until this point, convinced herself that her relationship with Rita is real and ongoing and that her career as an actor is taking a turn for the better.

The bulk of Mulholland Drive, beginning a few minutes into the picture and ending after Club Silencio, is likely a dream Diane Selwyn is experiencing. The dream cobbles together the people and events of her life in Hollywood in a way that makes them more appealing; she’s a blossoming actor, in a romantic relationship with a gorgeous woman, invigorated by an optimistic outlook on life. As she sits in Club Silencio and listens to the magician’s explanation of illusion, she’s reminded that it has all been false.

As the magician continues, he puts his hands in the air and conjures the sound of thunder. Diane/Betty begins to shake, and a woman is heard panting. The thunder ends with the sound of a male grunt. It’s theorized that Diane was sexually abused as a child, possibly by the elderly couple (her grandparents) that haunt her at various points throughout the film. If so, as Club Silencio breaks down the fabrication of her existence as Betty, Diane is reminded of the real horrors she has experienced in life.

Colors are symbolic throughout Mulholland Drive. Blue is one of the most prominent, showing itself in major ways at Club Silencio. The club itself is blue, draped in blue neon outside; there’s a blue-haired woman sitting in the balcony (in a coincidentally similar relative position and location (box seat, side of the box) as Abraham Lincoln sat in Ford Theater for his assassination); and Diane/Betty finds the blue key to the mystifying blue box. Blue is used as a transitional concept referencing the duality represented throughout the film. Blue manifests itself in numbers at Club Silencio, as it’s Diane’s final experience living the Betty facade. Llorando is the Spanish-language version of Roy Orbison’s "Crying," and the lyrics are symbolic of Diane’s illusionary relationship with Camilla:

I was all right for awhile
I could smile for awhile
But I saw you last night
You held my hand so tight
As you stopped to say, "Hello"

Oh, you wished me well
You, you couldn't tell
That I'd been crying over you
Crying over you

When you said, "So long"
Left me standing all alone
Alone and crying, crying
Crying, crying

It's hard to understand
But the touch of your hand
Can start me crying

I thought that I was over you
But it's true, so true
I love you even more
Than I did before

But, darling, what can I do?
For you don't love me
And I'll always be crying over you
Crying over you

Yes, now you're gone
And from this moment on
I'll be crying, crying
Crying, crying
Yeah, crying, crying
Over you

Betty and Rita cry while holding hands. When Rebekah del Rio falls down on stage and her voice continues to sing, the moment reinforces the illusion the magician has established.

As soon as the heartbreaking performance of Llorando is completed, and Diane accepts that nothing she’s been living and seeing is real, she returns back to the apartment with the intent of opening the blue box and instead vanishes. When Rita/Camilla uses the key on the blue box, it reveals a void of nothingness; she disappears herself, and the dream ends. (Recall that the real-life hitman presented Diane with a blue key to signify that he had completed the assassination of Camilla and warned her there’s no turning back from such a deed.) The film then transitions to the real-life Diane, and a sequence of flashbacks tell the true story of what happened and explain the presence of various mysterious figures from the dream.

The sequences unfold and Diane is shown in present day, unable to cope with the reality of what she has done to Camilla. She’s haunted by the elderly couple a final time, coupled with lightning effects and sounds like those that caused Betty to quake with fear in Silencio, and reaches in her nightstand for a gun. Next to the gun, a blue box can briefly be seen, and Diane shoots herself.

The blue-tinted smoke clears, and the illusion is gone. Manifestations of fear are shown, and the blue-haired lady (whom we've seen several times) returns to deliver the film’s final line: Silencio. Just like Lincoln, Diane dies by gunshot. As the film cuts back to her just after the act, the blue-haired lady becomes a symbol of death by gunshot.

Silencio is, essentially, where all of the film's complexity breaks down. Diane’s brain is in shambles, eager to believe that the truths of her existence are not what they are, replacing bits and pieces with a more comfortable narrative. The club reveals to her that self-delusion only works for a while; illusion is temporary, and when the magic ends, the show is over. Such is the case for Diane, as Club Silencio brings her back to a reality she can’t cope with, and she takes her own life.